Verizon Wireless Introduces Shared Usage Data Plan to Collect More $s from Mobile Data Users

In the the biggest revamp in wireless pricing in years, Verizon Wireless (VZW) is dropping nearly all of its cell phone plans in favor of pricing schemes that allow consumers to share data usage among up to ten 3G/4G wireless devices.  The nation’s largest cellphone company will introduce “Share Everything” plans on June 28th.  VZW is calling it a “groundbreaking” pricing scheme that will, “forever change the way customers purchase wireless services.”

“Share Everything” will  include unlimited phone calls and texting, and will start at $90 per month for one smartphone and 1 gigabyte of data.  The new plans will let individuals add non-phone devices like tablets and laptops to their plans, as well as the phones of family members.  It will allow users to cover up to 10 devices under one contract.

If used only with a single smartphone, “Share Everything” prices are lower than for current plans with unlimited calling and texting, but higher than plans with limited calling and texting.   Current VZW customers will be able to switch to the new plans or keep their old ones, but without subsidies for new smart phones.

Verizon Wireless currently offers a 2-gigabyte data plan for $30 monthly, and 5 gigabytes for $50 monthly. Some of Verizon’s customers still remain on unlimited data because they never changed their plans. Verizon has said that such customers cannot keep those plans if they want to upgrade their device with a subsidized one. Those who have unlimited-data plans for their smartphones won’t be able to move those to new phones, unless they pay the full, unsubsidized price for those phones. For example, an iPhone 4S that costs $200 with a two-year contract costs $650 unsubsidized, with no contract.

Bigger savings will come for those who add more devices like media tablets or game players to their plans. In such cases, the new pricing system will be cheaper compared to separate data plans for each device. That gives VZW a chance to capitalize on the growing popularity of tablets.  Under “Share Everything,” adding a tablet to a plan will cost $10 per month. Adding a USB data stick for a laptop will cost $20 per month.

The “Share Everything” composite device data allowances start at $50 per month for 1 gigabyte. That’s enough for prudent two-smartphone users who use Wi-Fi a lot, but Verizon recommends getting 2 gigabytes for $60. After that, each additional 2 gigabytes cost an extra $10 per month.

At first glance, this appears to be a new spin on “family plans.”  VZW already offers family plans that might be cheaper than its Share Everything plans, but they have lots of options and can be more confusing than the simpler pooled data plans, according to Venture Beat.

For the complete scoop on VZW’s Share Everything plan, please visit:

http://solutions.vzwshop.com/shareeverything/?intcmp=VZW-VNT-SE-PLANRECMND

AJW Comment and Analysis:

VZW’s new pricing plan takes into account the declining use of voice and increased consumption of mobile data, especially video.  The Share Everything plan encourages increased data usage by making it easier to add devices such as tablets.  But heavy mobile data users will have to pay a lot more for the data they consume.  For example, two smart phones [combined with a basic phone] with 4 GB of data will add up to $180 a month.  This may cause a huge shock when VZW subscribers get their monthly bills.

The new plan also permits VZW to collect revenue for mobile data that was once offered on an unlimited basis.  Those “all you can eat” plans won’t be very popular without the smart phone subsidies that VZW is ending.   Will consumers be willing to pay $650 for a 16-gigabyte iPhone 4S from Apple to keep their unlimited data plan? We don’t think so.

We think AT&T is likely to follow with a similar plan.  Sprint has said it will continue to offer unlimited data, while executives at T-Mobile have questioned the usefulness of multiple mobile users in a family sharing from one data pool.  The teenager downloading or streaming a video is likely to consume most of the allocated monthly data, which won’t sit well with the parents.

0 thoughts on “Verizon Wireless Introduces Shared Usage Data Plan to Collect More $s from Mobile Data Users

  1. You miss quoted the price for 2 smartphones with 4gb of data. That price would be ($40×2)+$70=$150. The current price for 2 smartphones on a 1400 talk and text plan with 4gb of data is $100+$19.98+$60=$179.98. This this example would save $30 a month and never have to worry about voice overage charges. The new plans would seem to eliminate voice overage, which is a considerable revenue for Big Red.

    1. Josh

      Thanks for your clarification which Ken has now fixed in the article.

      Regarding voice revenue, VZW (and other cellcos) recognize that there are so many free voice apps (e.g. Google voice, Skype, etc) for smart phones that subscribers aren’t using voice minutes like they used to do. In addition, many smart phone subscribers are using FB, Google+ or texts to chat with friends instead of calling them.

  2. There are a couple of things that strike me as interesting about these new plans:

    1) These plans clearly show how data is now the center of the wireless universe and voice is secondary.

    2) What is intriguing is that the data-only plans look very cost-competitive. For instance, it looks like one can get a data-only, tablet plan for $10/month together with 4 Gbytes of data for $30 per month for a total of $40 per month.

    http://solutions.vzwshop.com/shareeverything/pdf/verizon_share_everything_plan_details.pdf

    According to the literature, this includes WiFi hot spot capability (which begs the question of why one would also get this for a PC in that scenario). With a VoIP solution, one could solve their phone needs, so this looks very competitive. Granted, one would have to purchase the tablet with 4G capabilities.

    3) It is somewhat ironic, as today, the FCC announces that the new USF contribution rate is 15.7%. This has got to be at an all time high and will further drive people away from voice into data-only packages (e.g. one wouldn’t have to pay the 15.7% on the data-only plan).

    http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0611/DA-12-917A1.txt

    This points to the need for another way of deriving contributions to what will become the Connect America Fund. Here are some of my thoughts on that topic that remain relevant today even though they were written 7 or 8 years ago:

    http://www.viodi.com/newsletter/050201/#mac

    http://www.viodi.com/newsletter/040902/#usf

    http://www.viodi.com/newsletter/040801/article1.htm

    http://www.viodi.com/newsletter/040801/article2.htm

  3. AJW scooped the Journal! My article on this topic came out before the one in the on-line WSJ:

    Sanford Bernstein analyst Craig Moffett called the new plan structure “the most profound change to pricing in the telecom industry has seen in 20 years.”

    “In the high-fixed-cost world of telecom, pricing is the foundation of strategy,” Mr. Moffett wrote in a research note.
    ———————————————————————————————————————–
    Last year, data accounted for 37% of carriers’ $169.8 billion in wireless revenue last year, compared with 12% in 2006.

    Stifel Nicolaus analyst Christopher King expects total wireless service revenue at Verizon Wireless to rise from the plans. He noted that subscribers may also be less likely to switch carriers, although he does expect other providers to offer similar data-centric pricing models.

    http://online.wsj.com/article/SB10001424052702303901504577462241394886300.html?mod=djemTECH_t

  4. Verizon has all the usage models of its every single subscriber. They can easily analyze exactly what the impact on the revenue will be when the new plan goes in effect. The new plan is some relief for the customers who want to be able to get data-access for their multiple devices under the same plan. We can be 100% certain, Verizon’s overall short term and long term wireless revenues WILL go up! Alan is right, ATT’s rate hike is imminent.

  5. “About 44% of Verizon’s wireless customers are now smartphone customers, up from just 28% a year ago. The company sold 7.7 million smartphones in the fourth quarter, and of the phones that it sold with a two-year contract, a stunning 70% of were smartphones.

    Wireless sales grew by 13% to a record $18.3 billion. Thanks to the iPhone factor, Verizon’s wireless earnings fell 5% in the quarter, and the company’s wireless service profit margin was squeezed to 42% — down sharply from almost 48% in the previous quarter.

    For the year, Verizon said it sold 10.8 million iPhones and 14 million Android devices.

    Sales declined nearly 2% and profits were flat at Verizon’s comparatively struggling wireline business, though the division was buoyed by rising FiOS adoption.:

    This explains all moves – no customer will benefit from it …

    http://money.cnn.com/2012/01/24/technology/verizon_earnings/index.htm

    1. Dear ? (I like that anonymous moniker),

      Thanks for your comment. I think the customer that has multiple 3G/4G smart devices in a family might benefit, except if the teenager uses up the byte bucket by downloading/streaming videos.

  6. Counterpoint: Here’s a guy who says he’ll save money with VZW’s new plan. Also says small biz will also benefit.

    “the new Verizon Share Everything plans work out in my favor, and will save me 20 percent under what I’m paying for my current Verizon plan.

    The new plan will most likely benefit small businesses as well. Most users or devices don’t really consume all of the data allocated in their respective plans, so pooling the data lets you cut costs by paying only for the data you’re actually using”

    http://www.pcworld.com/businesscenter/article/257524/breaking_down_the_verizon_share_everything_plan_math.html

  7. A Citigroup analyst says that VZW new data plan is to counter free texting and replacement of cellular voice with VoIP . Citi’s Simon Weeden said that non-telecom companies will likely offer VoIP services over 4G wireless networks using LTE.
    Apple, meanwhile, already offers a free texting app as do others, such as WhatsApp. The free texting apps have siphoned revenue from wireless firms, and VoIP apps would do the same.
    Wireless carriers such as Verizon, AT&T, and Sprint Nextel (S) aren’t expected to roll out their own Internet calling plans over LTE networks until 2014.

    Verizon Communications CEO Lowell McAdam, at a Guggenheim Securities conference earlier this month, said customers will adjust to the “Share Everything” plans.

    http://news.investors.com/article/616126/201206260837/verizon-data-sharing-plan-apple-voip-calls-smartphones.htm

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